Wednesday, December 21, 2011

We obviously haven’t had a chance to scrutinize all aspects of this, but here are a few quick thoughts:

This is truly history in the making. It is indeed a landmark accomplishment. After more than two decades of delay, dirty coal-fired power plants are going to be cleaned up in short order. The dirty, soot-spewing coal plant will soon become a relic of the past – a dirty industrial dinosaur.

Today’s action ensures that the cleanup of coal-fired power plants will be the signature clean-air achievement of the Obama administration. These standards complement the first cleanup phase embodied in EPA’s so-called Cross-State rule. In our opinion, these standards combined are more significant than the laudable vehicle fuel economy standards because cleaning up dirty power plants translates directly into massive health benefits. Americans everywhere will breathe easier – and will find fish safer to eat. And the EPA bent over backwards to accommodate concerns about electric reliability.

To understand how really positive today’s action is, one only need listen to the squeals coming from cleanup opponents. They lost this one.
On that note, a quick point. It has been alleged that the prior Bush administration issued the “first-ever” mercury standards for power plants.

Well, not really. Those of you who have been around will recall that the Bush EPA issued a more industry friendly cap-and-trade scheme calling for a reduction in the overall national amount of mercury from power plants over a very protracted timetable. Some analysts projected that the overall emissions would be reduced by about 69-70%, but not until 2026! Even then, many plants would have avoided any mercury emission controls. Oh, and by the way, a federal appeals court tossed out the Bush plan as obviously illegal (it did not require all power plants to meet a standard) and even made fun of the Bush crowd, saying they had used “the logic of the Queen of Hearts.” http://www.cadc.uscourts.gov/internet/opinions.nsf/68822E72677ACBCD8525744000470736/$file/05-1097a.pdf

In any event, the standards issued today will require much more cleanup much more quickly than the weak Bush approach.

A final note: you will doubtless observe as we did that some of the projected costs and benefits are both lower than those projected in EPA’s March proposal. As I understand it, these are the result of some things that have happened in subsequent months. For example, TVA agreed to a massive, multi-billion dollar cleanup in April

To avoid any legitimate charge of “double counting” benefits, EPA removed those benefits (eg, up to 3,000 premature deaths a year avoided by the TVA cleanup) from those itemized today. Likewise, because of new lower projections of natural gas prices. EPA is not counting air pollution benefits resulting from companies ramping up gas use or building new gas plants chiefly for economic reasons. Similarly, EPA now expects some companies to use less costly pollution controls than previously anticipated because of comments it received.

Saturday, December 17, 2011

The Obama administration finished crafting tough new rules Friday curbing mercury and other poisons emitted by coal-fired utilities, according to several people briefed on the decision, culminating more than two decades of work to clean up the nation’s dirtiest power plants.

As part of last-minute negotiations between the White House and the Environmental Protection Agency, the regulations give some flexibility to power plant operators who argued they could not meet the three-year deadline for compliance outlined by the EPA. Several individuals familiar with the details declined to be identified because the agency will not announce the rules until next week.

The new rules will cost utilities $10.6 billion by 2016 for the installation of control equipment known as scrubbers, according to EPA estimates. But the EPA said those costs would be far offset by health benefits. The agency estimates that as of 2016, lowering emissions would save $59 billion to $140 billion in annual health costs, preventing 17,000 premature deaths a year along with illnesses and lost workdays...

Several experts said the new controls on mercury, acid gas and other pollutants represent one of the most significant public health and environmental measures in years. The rules will prevent 91 percent of the mercury in coal from entering the air and much of the soot as well: According to EPA estimates, they will prevent 11,000 heart attacks and 120,000 asthma attacks annually by 2016.

“I think this will prove to be the signature environmental accomplishment of the Obama administration,” said Frank O’Donnell, who heads the advocacy group Clean Air Watch. “It will soon mean the end of the smoke-spewing coal power plant as we know it today. At the same time, the administration is trying to add a bit of flexibility to extinguish the bogus claim that these standards could mean lights out.”

Tuesday, December 13, 2011

Inside the Beltway is abuzz this week about a letter (below) sent to President Obama by various industry lobbies. The letter urges delays in EPA’s power plant cleanup for mercury and other toxic pollutants (an announcement is now expected next Monday).

Some of the letter signers are no surprise, given the U.S. Chamber of Commerce’s opposition.

But here is the buzz – and the big question: why are the American Gas Association and the Nuclear Energy Institute among those calling for delays in coal power plant cleanup? Hasn’t one of the big claims been that the cleanup would reduce coal use—and lead to more use of alternatives, especially gas? I best most of the members of some of these groups – especially the gas and nuclear crowd – had no idea their DC representatives were selling them out.

Is this simply a case of inside-the-Beltway lobbyists scratching each other’s back – even if that harms member companies of those lobbies? (One of DC’s secrets is that the lobbyists do need to keep creating billable hours for themselves.) Do some of the most strident cleanup opponents, particularly Southern Company and American Electric Power, have enough juice to persuade the gas and nuclear lobbies to slit their own wrists?

Or could this just be a classic case of anti-regulatory political ideology triumphing over factual reality?

In any case, the President should ignore this silly letter. Coal power plant cleanup is long overdue. It will be highly cost effective. And it will save lives and prevent sickness.

The organizations listed below share a common belief that affordable and reliable electricity is
critical to our economic growth and job creation. We also share a deep concern that the Utility
MACT rule, due to be issued by the Environmental Protection Agency (EPA) on December 16,
2011 could cause significant electricity reliability constraints that would have a ripple effect
through our fragile economy, hurting businesses of all sizes. We urge you, as President, to
provide the leadership necessary to ensure that electric reliability risks of the final rule can be
managed effectively.

Reasonable regulation and regulatory certainty are essential for businesses to grow and prosper.
By contrast, regulatory uncertainty is a deterrent to putting Americans back to work, particularly
for small businesses. The potential costs of the UtilityMACT rule could have a major impact on
job creation and consumer demand for our products and services.

It is clear that some utilities will need additional time to comply with this rule beyond the three
or four years allowed under the Clean Air Act. Utilities must replace power plants, install
compliance equipment and build new natural gas pipelines and transmission lines. This is going
to cost tens of billions of dollars and require a reasonable number of years for a smooth transition
to a cleaner generating fleet. If the final rule fails to recognize these realities, our entire economy
will suffer.

The organizations responsible for the reliability of the electric grid—including the North
American Electric Reliability Corporation and regional transmission organizations—have
expressed serious concerns about the impact of the Utility MACT rule on reliability as electric
utilities replace power plants and install controls on so many plants during the same short time
period. The members of the Federal Energy Regulatory Commission (FERC), which is
ultimately responsible for grid reliability, stated as recently as last Wednesday, that utilities
should not be forced to choose between reliable electric service and meeting environmental
requirements. While we agree with EPA’s proposal to provide an additional year to some power
plants for the installation of controls, we believe it should be a categorical extension of time. We
also urge you to delegate your presidential exemption authority under the Clean Air Act to
provide additional time as needed to those facilities that are making good-faith efforts to achieve
compliance.

We believe the goals of protecting public health and the environment and maintaining a reliable
electric system can both be met through an orderly and realistic transition period under the
Utility MACT rule. Achieving these goals will require your presidential leadership, and we urge
you to act.

Saturday, December 10, 2011

Rumor of the day: the President and Senate leaders are reported to be entertaining the idea of including in the pending tax legislation an amendment or rider that would block EPA toxic air pollution standards for boilers. Deals are being cut behind closed doors this weekend.

Let’s hope this is not true. The Obama administration appears to be expecting environmentalist applause for its upcoming mercury/toxic standards for electric power plants. It would be pretty hypocritical to permit the same type of toxic emissions to continue spewing from industrial boilers.

U.S. Senate Committee on
Environment and Public Works
Boxer Calls on House Republicans to Stand with American People, Not Polluters
Calls for dropping dangerous riders from must-pass legislation

Washington, D.C. – Senator Barbara Boxer (D-CA), Chairman of the Environment and Public Works Committee, is calling on House Republicans to drop dangerous provisions from their payroll tax cut legislation that would stop a clean air rule that protects the American people from toxic mercury and arsenic pollution. The proposal also includes a provision to immediately move forward on the tar sands XL pipeline without proper consideration of public health and safety.

Senator Boxer said: “Why on earth would the Republicans give a payroll tax cut with one hand, and with the other hand, increase the likelihood of premature deaths, heart attacks, cancer, and developmental disabilities in children?

We know that this boiler MACT rule that Republicans are rushing to repeal will prevent up to 8,100 premature deaths per year, 52,000 asthma cases per year, 5,100 hearts attacks per year, and 400,000 lost work days per year.

There is no reason to do this other than to protect the largest polluters in the nation who should be cleaning up their act.

I also call on House Republicans to drop their provisions approving the controversial tar sands XL pipeline provision. As President Obama has said, this needs further study on the project’s implications for public health and safety. In fact, questions have been raised about the health and safety reviews to date and their connection to the polluter.

If there is one thing all Americans are united on it is their negative feelings about attaching unrelated matters to must-pass legislation that is needed to protect the economy -- especially when these provisions haven’t even had a vote. The House Republicans need to acknowledge that they should be serving the people, not the polluters.”

Friday, December 09, 2011

The story of the day comes from us courtesy the National Journal, which reports exclusively that the big NJ-based utility PSEG has broken ranks with the Edison Electric Institute over the latter’s attempts to weaken EPA’s mercury/toxic standards for electric power plants. Please note below.

PSEG Chairman and CEO Ralph Izzo deserves our praise and thanks for his courageous position. (It’s always tough to step out from groupthink like this. Other utility execs have not.) Bravo!

I do want to point out that the story completely verifies what we have been reporting: that EEI – pushed by cleanup laggards American Electric Power and Southern Company – has been seeking not only cleanup delays and loopholes, but to weaken the mercury standard itself. Talk about greed!

What’s the next step? I guess it would make sense to ask EEI what it plans now that its ranks are so openly fractured.

Internal rifts within the nation’s largest utility trade group keep popping up as the Obama administration’s new rules for mercury emissions loom.

An executive of a major power company told National Journal he is pulling away from the formal position the Edison Electric Institute has taken in objecting to the Environmental Protection Agency’s mercury standard for power plants, which EPA plans to finalize on Dec. 16.

Ralph Izzo, chairman and CEO of Public Service Enterprise Group, a New Jersey-based utility, said in an interview on Thursday that his company was willing to compromise on delays to the rule, but when EEI started discussing increasing by 20 percent the amount of mercury pollution allowable under the rule, that was the last straw. His company pulled out of the internal negotiations and consensus position two weeks ago.

It remains unclear whether EEI, which chose not to comment for this story, ultimately ended up pitching the higher allowable pollution level to the White House or EPA. The rule is currently going through regulatory review at the White House’s Office of Management and Budget.

“The cumulative weight of the concessions finally came crashing down when the mercury standard began entering into debate,” Izzo said. PSEG’s power generation mostly comes from natural gas and nuclear power—energy sources not affected by EPA’s mercury rule—and about 18 percent from coal, the dirtiest form of electricity, which will be affected the most by EPA’s mercury rule. Coal is also the cheapest and most prevalent, providing nearly half of the nation’s electricity.

Current law requires companies to comply with the rule by 2015.
Izzo said that his company was originally part of a group of EEI member companies that had agreed to EEI’s consensus position despite not being wholeheartedly on board with some of those provisions. Those provisions include a one-year blanket delay for all power companies to comply and the possibility of invoking a presidential exemption that would allow for two or more years to comply if national security was at risk. If a power plant that generates electricity for a military base is shut down because of an EPA rule and grid reliability is jeopardized, the reasoning goes, that could present a national-security concern.

“We weren’t fond of the one-year delay and we weren’t fond of the presidential exemption,” Izzo said. “But in the interest of compromise and getting a rule we could all live with and not spend the rest of eternity battling in the courts … we were willing to compromise on several of those provisions.”

Izzo, who has been with PSEG in various executive positions since 1992, said he has never known a time when his company departed from EEI’s consensus position before.

“EEI does a lot of very good things that we’re supportive of,” Izzo said. “This disagreement would not push me to leave the organization.”
Internal divisions with a trade group as diverse as EEI are not uncommon and should not be surprising despite the media attention such rifts generate. Unity is critical when trying to convince the White House and EPA to delay or change the rule in any significant way, such as whether companies should have blanket extensions to comply or whether mercury pollution levels should be weakened.

While coal utilities like Southern Company and American Electric Power have been the most vocal about asking for more time, even some clean-burning utilities that will be able to comply within three years are fully on board with EEI’s request for more time, further complicating the internal dynamics of the group.

“It’s hard to get anybody’s assurances that they will get the flexibility they need the way the draft rule proposal has been written,” Lewis Hay, chairman and CEO of NextEra Energy, said in a phone interview last week. “That’s why I strongly support the one-year blanket extension.” NextEra Energy is the largest generator of wind and solar power in the country.

With its usual heavy-handed approach, the Chamber visually portrays the standards as causing a blackout of the Manhattan skyline. This is utterly ludicrous and a dumb choice for an image. New York State has among the toughest emission standards in the nation. It was the state with the first acid rain controls, it has tough in-state standards on NOx, in-state limits on mercury and also is a member of RGGI. The lights have never gone out on Broadway as a result of emission standards.

Wednesday, December 07, 2011

We have promised to keep our ear to the ground on the fierce lobbying on the EPA mercury/air toxic rule for power plants. There is an excellent story in today’s National Journal, but here is the very latest:

We are informed reliably that the White House Office of Management and Budget, at the behest of the coal-burning electric power industry, is now pushing the EPA to weaken its mercury pollution control requirements in its upcoming toxic pollution rule for power plants. Power companies could emit almost 20% more mercury under the dirty power industry scheme being promoted by OMB bean counters.

This is nothing short of outrageous. The White House should immediately disavow this latest attempt by OMB staffers to front for dirty industry. (You will recall the recent excellent report by the Center for Progressive Reform on the topic of OMB, its meetings with industry, and its impact on EPA. http://www.progressivereform.org/articles/OIRA_Meetings_1111.pdf )

The push for weaker standards initially came from the so-called Utility Air Regulatory Group, which called last August in its official comments to EPA for a weakening of the proposed mercury standard from 1.2 lb/TBtu to 1.42 – or going roughly from a 91% mercury control requirement to about 75%. This change would mean thousands of additional pounds of toxic mercury being spewed into the environment each year.

The current push is being driven principally by Southern Company and American Electric Power Company because they apparently believe a weaker standard would cost them less.

Some trade off: more brain poisons so a couple of big companies could save a few bucks.

EDITOR'S NOTE: An occasional look behind the rhetoric of public officials.
WASHINGTON — The issue may be dust in the wind, but Republicans are still moving to block it.
Environmental Protection Agency officials have said — over and over again — that they won't propose new regulations to limit dust kicked up by farm equipment. But anti-regulation sentiment is strong this year on the campaign trail, and real or not, House Republicans are planning to vote this week to prevent such regulations.
Republicans and even some Democrats have told farm-state audiences that the EPA is considering a crackdown on farms, despite the agency's public statement in October calling that a "myth."
Supporters say they are pushing the bill this week because they want more certainty for the agriculture industry. The House GOP has pushed a host of measures aimed at weakening, delaying or scrapping environmental regulations in recent months, saying they view them as job killers.
South Dakota Rep. Kristi Noem, the bill's sponsor, says the EPA's assertions don't "hold a lot of water" for wary farmers.
"The EPA has been so aggressive on a lot of its policies, so we just want to make sure they can't take any action that can hurt the farm industry right now," she said.
Democrats have scoffed at the bill and are calling it a waste of time.
Maryland Rep. Steny Hoyer, the No. 2 Democrat in the House, joked sarcastically on Tuesday that the bill is "critically important" since the EPA has said they have no intention of regulating farm dust.
"We are once again doing a bill that is not necessary and has no effect," Hoyer said at a news conference at the Capitol.
In letters to two senators in October, EPA Administrator Lisa Jackson said the agency won't expand its current air quality standards to include dust created by agriculture. "We hope this action finally puts to rest the misinformation regarding dust regulation and eases the minds of farmers and ranchers across the country," Johnson said then.
That didn't stop the opponents' message machine. Just a few weeks later, Republican presidential candidate Herman Cain, who has since suspended his campaign, ran a television ad in Iowa that quoted a farmer saying "The EPA wants to regulate dust."
Though Republicans often blame the Democratic Obama administration for an overly aggressive EPA, the Republican Bush administration also had a hand in the matter. The Bush EPA proposed regulating rural and urban areas when it comes to "coarse particulate matter" in the air, meaning farms could fall under tighter restrictions. Farm groups challenged that in court, and a federal appeals court ruled in February 2009 that the EPA had already provided the evidence necessary to determine farm dust "likely is not safe."
Obama's EPA initially defended that decision. An EPA spokeswoman said after the ruling that regardless of whether someone lives in a rural or urban area, the threshold for unsafe levels of dust in the air should remain consistent nationally. But later, Jackson said the agency was unlikely to single out farm dust.
Under current rules, states are tasked with making sure that their levels of particulate matter in the air are below certain levels. Farm groups worried, however, that their pollution — dust kicked up behind a combine, for example — would be targeted separately.
Environmentalists say the House bill, which is not likely to make it through the Senate, would prevent the EPA from even considering tighter regulations if that became necessary for public health.
"When it comes to stuff in the air that could harm your health, it would be nice if the government could at least do an honest assessment," says Frank O'Donnell, president of Clean Air Watch. He says the bill is "totally detached from reality — the kind of issue that makes people cynical about Congress."

Monday, December 05, 2011

You may recall that industry spokespeople have claimed for many months that requiring big polluters to obtain greenhouse gas permits would harm the economy. For instance, when Texas under Governor Rick Perry refused to issue permits -- and the US EPA was forced to step in -- former EPA official (and current power industry lobbyist) Jeff Holmstead asserted "EPA takes forever to do permits."

But now it appears those concerns were overblown, to say the least. The authoritative BNA Daily Environment Report has published a special report detailing its investigation of real-world permit situations.

BNA found businesses were obtaining permits with "few problems." The publication found that 17 major sources of pollution have already obtained greenhouse gas permits this year, and that it has been a "smooth transition" to include greenhouse gases among permitted emissions. Contrary to some fears, the permit requirements did not prompt fuel switching.

Industries, Regulators Report Few Problems
With Greenhouse Gas Permitting Program
BNA Snapshot
Greenhouse Gas Permitting for Industrial Sources
Key Development: EPA and states have approved 17 greenhouse gas permits for new and modified industrial sources with few problems reported since permitting began Jan. 2.
Potential Impact: Industries still have concerns with how regulators determine the required greenhouse gas controls and conflicts with other air pollution rules.By Andrew Childers
The addition of greenhouse gas emissions to the prevention of significant deterioration permitting process has largely been a smooth transition, industry representatives and state regulators told BNA.
EPA and state regulators have finalized 17 permits through Nov. 21 that limit emissions of greenhouse gases from new and modified industrial sources since the permitting took effect Jan. 2. Another 100 are pending, the agency said.
Industry representatives said the permitting process has gone more smoothly than they may have initially predicted. However, they say they are still concerned about how controls are determined and potential conflicts with other pollutant rules.
“The fact there have been 17 permits approved shows states are really figuring out how to do this,” Margaret Peloso, an attorney at Vinson & Elkins LLP who works on permits for industry clients, told BNA.
Permits Target Efficiencies
PSD requires new and modified sources to obtain permits for emissions of regulated air pollutants and to control those emissions using best available control technology (BACT), determined individually for each source
Permitting includes a review process to determine the optimal controls for each facility, or BACT. The BACT process is a “top down” review that begins by identifying all available control technologies.
For greenhouse gases, that could include expensive and infeasible options such as carbon capture. However, as the review proceeds, it eliminates controls that are infeasible, too expensive, or environmentally inefficient.
EPA said the majority of the permits issued have focused on energy efficiency as a surrogate for greenhouse gas controls, something the agency recommended in its guidance to states (217 DEN A-5, 11/12/10).
Permits issued to date largely require facilities to ensure they are burning fuel as efficiently as possible.
Because the controls are determined for each facility and only 17 permits have been approved in 12 states and one for drilling in the Gulf of Mexico, industries said it is difficult to detect any trends in how EPA and states are applying the BACT controls.
“It's hard to know how this is going to play out until we see more units permitted and different types of units and how the guidance gets applied or not applied by state authorities and EPA to an individual set of circumstances,” said Steve Kohl, a partner at Warner, Norcross & Judd LLP who represented the Wolverine Power Supply Cooperative for two permit applications in Michigan.
However, reducing emissions through efficiency has been the main focus for permits.
EPA also has indicated its preference to have specific emissions limits included in permits, rejecting a permit in Utah that did not include specific greenhouse gas limits.
And EPA went further with a permit it issued recently in Texas. The agency set limits for individual greenhouse gases, rather than a general limit on overall emissions based on their carbon dioxide equivalency.
Permitting ‘Not as Traumatic.'
Permits that have been issued have not required industries to switch fuels or make other changes to their business practices, Peloso said.
“What you're seeing is once states get down to the brass tacks of the doing it, it's not as traumatic as it could be,” she said.
Don Neal, vice president of environment, health, and safety for Calpine Corp., told BNA that the PSD permits issued for other regulated pollutants often included provisions limiting the amount of fuel that could be burned in a year as part of their required pollution controls.
Regulators have been able to convert that restriction into a numeric greenhouse gas emissions limit based on the chemical composition of the fuel, he said.
“No one should have an issue with complying with that because you've already limited, per se,” Neal said.
Calpine received one greenhouse gas permit in February for a 600 megawatt natural gas-fired combined cycle power plant and has three other applications pending (23 DEN A-5, 2/5/10).
Marty Gray, section manager for major new source review at the Utah Department of Environmental Quality, told BNA Dec. 1 that EPA's guidance document and the three permits issued by the federal agency have provided valuable examples of the agency's expectations.
Gray said states are not only examining the efficiency of individual pieces of equipment, but EPA is encouraging them to create a monitoring process to track any decline in efficiency as the units age.
“It's gone pretty smoothly for us once we recognized what EPA's concerns were,” he said.
Michigan Leads in Permitting
Michigan leads all states in permitting, having approved three to date. Iowa has approved two permits while California, Kansas, Louisiana, Minnesota, New York, Pennsylvania, South Dakota, Utah, and Wisconsin have issued one each. EPA has issued permits in California, Texas, and the Gulf of Mexico.
PSD permitting requirements for greenhouse gas emissions began Jan. 2, with industrial facilities required to obtain permits if they also would be required to obtain the permit for other pollutants, such as nitrogen oxides or sulfur dioxide.
As of July 1, new industrial facilities that emit the equivalent of 100,000 tons of carbon dioxide per year and modified sources that increase their emissions by 75,000 tons annually were required to get PSD or Title V operating permits for greenhouse gases regardless of whether they triggered the permitting thresholds for other air pollutants.
EPA had predicted as many as 900 new applications under the permitting requirements, but state regulators have said those estimates were off (111 DEN A-2, 6/9/11).
EPA Criticizes Utah Permit
EPA has kept a close eye on the efficiency measures required by state and local regulators.
“I do think the regulators are paying attention to, ‘Is this really as efficient as it could be?' They're still looking at, ‘Does that equate to an energy efficient unit,' ” Kohl said.
EPA in a March 4 letter criticized a permit proposed by the Utah Department of Environmental Quality for PacifiCorp Energy, which plans to add two natural gas-fired generating units to its existing Lake Side Power Plant in Utah County.
EPA said the proposed permit would have required PacifiCorp to use “high efficiency” gas turbines with heat recovery steam generators rather than set numeric emissions limits on greenhouse gases.
“High efficiency” was never defined sufficiently in the permit, the agency said.
The two new units would double the facility's greenhouse gas emissions to 1.8 million tons per year of carbon dioxide equivalent, according to the facility's permit.
“This proposal of an undefined design standard as BACT, rather than a numerical emission limit, does not satisfy the definition of BACT” under the Clean Air Act or Utah's state implementation plan, EPA said.
The final permit issued to PacifiCorp in May limited the plant's annual greenhouse gas emissions to 950 pounds per megawatt-hour.
Gray said the efficiency requirements in the proposed permit were equivalent of the eventual numeric emissions limit, but Utah added the numeric limit after consulting with EPA.
“We basically tried to follow the guidance EPA had put out for that,” he said. “The only thing we didn't do was establish an actual limit. That's where we had a falling out with EPA. Once they explained the importance of that we went ahead and did that.”
Texas Permit Targets Individual Gases
Most of the permits issued to date have set emissions standards for greenhouse gases on a carbon dioxide-equivalent basis.
However, the permit issued for the Lower Colorado River Authority's Thomas C. Ferguson Power Plant in Texas includes individual emissions limits for methane, nitrous oxide, and sulfur hexafluoride, all greenhouse gases regulated by EPA. Hydrofluorocarbons, perfluorocarbons, and carbon dioxide are the other regulated greenhouse gases (219 DEN A-7, 11/14/11).
Industry representatives said they are closely watching to see if other state regulators set limits on individual greenhouse gases in EPA's wake.
The Lower Colorado permit is “potentially a signal that EPA as a whole is going to be looking for more defined, numeric limitations. How states are going to arrive at those is a very important question,” Peloso said.
EPA is issuing greenhouse gas permits in Texas because the state refused to implement a greenhouse gas permitting process. It is the only state to refuse to update its state implementation plan to include greenhouse gas regulations in its PSD requirements.
While EPA has taken over greenhouse permitting in Texas, the state continues to administer prevention of significant deterioration and new source review permitting for other regulated pollutants.
That places applicants in Texas on a two-track review system.
Calpine has two pending applications in Texas, Neal said.
“It will be interesting to see who issues the permit first,” he said. “So far, based on the discussions we've had with Region 6, things are progressing well.”
Permitting, Nitrogen Rule Could Conflict
Another concern for industries is how the greenhouse gas control requirements will be affected by EPA's more stringent air quality standards for nitrogen dioxide.
The permits typically require facilities to improve how efficiently fuels are burned, reducing emissions of carbon dioxide and other greenhouse gases. However, that improved combustion efficiency tends to increase emissions of nitrogen oxides.
This creates a “tension” in the BACT analysis between the two pollutants, Peloso said.
“In some cases that has caused greenhouse gas BACT not to be as high as it could be,” Peloso said. “That could become particularly significant as the new one hour standard for [nitrogen dioxide] comes into place.”
EPA issued the first hourly national ambient air quality standard for nitrogen dioxide of 0.10 part per million (100 parts per billion) in February 2010 (75 Fed. Reg. 6473; 15 DEN A-4, 1/26/10).
Areas not in attainment of EPA's nitrogen dioxide standards may be forced to accept higher greenhouse gas emissions as a result, Peloso said.
“If you're looking at a site where you have very stringent controls on [nitrogen oxides] and compliance must be achieved through modeling, which makes that level of control more stringent, it's going to force state permitting officials to make some very significant tradeoffs,” she said.
Regulators have successfully dealt with similar conflicts through the BACT process before, Neal said.
The oxidation catalysts used to reduce emissions of volatile organic compounds and carbon monoxide increase emissions of particulate matter, he said.
“That's the beauty of the top-down BACT process. That's what it's designed to do,” Neal said.

Friday, December 02, 2011

Dear friends, as you probably know, the US EPA today is releasing a new proposal to deal with the toxic pollution caused by industrial boilers and related activities.

This has been an extremely controversial issue, with a range of polluters lobbying Congress to block EPA from taking action. The House of Representatives obliged, taking both dictation and campaign contributions, though the President has said he would veto rollbacks.

EPA does seem to be working hard to make sure that the cleanup produces cleaner air in a practical and affordable way. It notes that the proposed standards would avoid up to 8,100 premature deaths and 52,000 asthma attacks a year. It also estimates that every dollar in cost would produce $12 to $30 dollars in benefits. Even the bean counters like OMB’s Cass Sunstein ought to like this one.

It appears that more than 99 percent of boilers in the country are either clean enough that they are not covered by these standards or will only need to conduct maintenance and tune-ups to comply. Today’s proposals focus on the less than one percent of boilers that emit the majority of pollution from this sector. Even among the biggest industrial boilers (14,000 of them), 88% percent of those would be required to conduct periodic tune-ups. Only 12% would be required to take steps to meet
emissions limits if they do not already meet them. http://www.epa.gov/airquality/combustion/docs/20111202msboilerfs.pdf

So EPA is really trying to focus the cleanup on the biggest and dirtiest boilers out there.

This is obviously a very serious source of toxic pollution – one that needs to be dealt with to protect public health.

Opponents in Congress ought to stand down and let the agency move forward with what looks to be at least an effort to deal with this mess in a practical and cost-effective way. (This is, by the way, just a proposal. Industry groups and others will doubtless continue to sound off as we all examine this proposal in more detail.)

Thursday, December 01, 2011

As you know, the plot continues to evolve over the EPA’s upcoming mercury/toxic pollution standards for power plants, with leading companies now pressing hard at the White House for various delays and loopholes. As the National Journal reported (below), even a cleaner power company that has tried hard to scrub its image has joined with its dirtier Edison Electric Institute frat brothers to press for weaker requirements.

(4) Presidential exemption
The President may exempt any stationary source from compliance with any standard or limitation under this section for a period of not more than 2 years if the President determines that the technology to implement such standard is not available and that it is in the national security interests of the United States to do so. An exemption under this paragraph may be extended for 1 or more additional periods, each period not to exceed 2 years. The President shall report to Congress with respect to each exemption (or extension thereof) made under this paragraph.

This provision is like the ultimate safety valve, and clearly wasn’t meant to be used except in the case of a genuine emergency. (As you probably know, the Clean Air Act already gives companies 3 years to clean up, with a possible extension of a fourth year.)

Further delays and loopholes seem to be nothing but a gift to industry. (Even DOE now says the EPA standards won’t pose a reliability threat http://1.usa.gov/sTgpSz )

But the Edison Electric Institute is trying to exploit this exemption and broaden it into an institutionalized Obama Loophole. EEI floated some illogical concepts in its official comments, arguing that a “national security” exemption should apply if a delay is certified by a non-governmental organization like NERC or an RTO to be “consistent with the state-approved integrated resource plan (or similar state process).” Consistent, in other words, with a company-designed road map. A rather cheesy way, don’t you think, to justify spewing more poisons?)

We understand the latest EEI pitch includes trying to institutionalize this exemption by seeking that it be written directly into EPA’s preamble and/or rule itself, and possibly asking that the President delegate his authority directly to the EPA.

Now we generally like the EPA, but this idea of an Obama Loophole is only being floated because the companies think they can exploit it further if it’s actually written into the rule or preamble. The question of the moment: why would the White House possibly entertain such an outlandish demand?

Under President Obama’s watch, the Environmental Protection Agency has set up the first national standards for mercury emissions and other dangerous chemicals from coal and oil-fired power plants.

The new rules will help to clear our skies of pollutants that can make health problems like asthma and bronchitis worse, saving up to 17,000 lives each year.

Yes, that is the Obama re-election campaign noting that each year of delay could mean up to 17,000 premature deaths.

So why would on earth would the President and his staff permit these standards to be undermined by insider lobbying?

Is there some unreported personal relationship involved?

As you probably know, one of the critical EEI lobbyists is Brian Wolff, former head of the Democratic Congressional Campaign Committee. He was, for example, documented at an OMB meeting with White House big dogs like Cass Sunstein and Heather Zichal. http://www.whitehouse.gov/omb/2060_meeting_10312011

We will continue tracking this and related angles to this still-evolving story.

Below is the story I referenced if you haven’t already seen it.

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ENVIRONMENT
Clean-Energy Company Joins Call for More Time on EPA Rules
By Amy Harder

Coal companies aren’t the only ones who want the Obama administration to give at least one year—and more if necessary—for utilities to comply with new clean-air rules.

Lewis Hay, chairman and CEO of NextEra Energy, the largest generator of wind and solar power in the country, told National Journal on Wednesday that he thinks the Environmental Protection Agency should give all companies one more year to comply with the agency’s mercury standard that EPA is expected to finalize by Dec. 16. He says that extra year is critical to ensure utilities can continue providing electricity without putting at risk grid reliability when old plants get retrofitted or replaced with cleaner plants. Current law requires companies to comply with EPA’s mercury standard by 2015.
“It’s hard to get anybody’s assurances that they will get the flexibility they need the way the draft rule proposal has been written,” Hay said in a telephone interview on Wednesday evening. “That’s why I strongly support the one-year blanket extension.”
Hay takes that position despite confidence that his company, which produces 50 percent of its capacity from wind energy, would be just fine without more time. “We will be in full compliance on time in the initial three-year period,” he said. “We will not have any reliability issues."
Hay's views coincide with the official position of the Edison Electric Institute, which represents 70 percent of the U.S. power industry. Hay is vice chairman of EEI and a member of President Obama’s Council on Jobs and Competitiveness.
Hay also said he supports EEI’s request that Obama issue an executive order that could give certain companies at least two more years to comply if national security were at risk. In industry circles, this is known as the “presidential exemption” outlined in Section 112 of the Clean Air Act. If a power plant generating electricity for a military base is shut down because of an EPA rule, the reasoning goes, that could present a national-security concern.
Hay argued that the administration should be ready to “potentially utilize the presidential exemption.”
Kathleen Barron, vice president for federal regulatory affairs and policy at Exelon, the nation’s biggest nuclear-reactor company and also one of the biggest supporters of EPA rules, said at a conference on Wednesday that her company would also support the presidential exemption in limited situations.

National Journal reported earlier this week that utilities with coal-fired power plants—which would be most affected by EPA's mercury rules—are urging the administration to use the presidential exemption to provide companies more time to comply with the regulations.

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